Trader Mindset

You need two variations of your marketing message: one for individuals and high-net-worth families, and another for institutional investors and allocators.  These two segments speak different languages and their concerns are very different. For example, if you launch into your pitch loaded with industry jargon to a HNW family, they won't understand a thing you're saying, whereas the allocator will...

Write out a short list for some of the things that you're grateful for. This is your Gratitude List and it can help you feel a little bit better about things when you think nothing is going right.  You can try this just when you think you're gas tank is empty and you don't know where your next source of motivation might come from. Do everything you can to remain persistent and determined. 

If you have no trading edge, where you execute your business doesn't matter. 

Putting space between yourself and the market can be refreshing.  You don't have to do this only when you're losing.     

You can learn trading faster intellectually rather than emotionally. That's why it's easy to understand, but hard to do. Your emotions can get the best of you, stop you cold in your tracks, kill your confidence, and keep you at the level of a very knowledgable spectator. 

Just like professional athletes and competitors prepare mentally for a match, so can you. In fact, you have to. You can't just wing it. Intentions equal results. Put it in your mind that you are going to achieve your goals then go and do it.

Here's a great example of how to combine your passion for one area of your life that can potentially benefit your business. 

Michael Martin discusses how you can get potential clients to come to you.

People do business with people they like - so be likable.  If you're a fly fishing nut and know all the best spots to fish, you can find like-minded people to cohort with by joining a group or association that is passionate about fly fishing. Or even better, you can start a weekenders fly fishing getaway for which you are the guide.  Successful businessmen like to fish and be outdoors, so it's a g...

Setting personal goals in parallel with you trading goals can have a 1+1=3 type of payoff. For one, achieving personal goals can give you a boost of confidence and raise your self-esteem. I generally believe that it's impossible to do anything well if you lack confidence.  Trading is a game of failure and learning to succeed in the face of low accuracy and high expected values can help you develop...

Position sizing has the most impact on your P&L, so make sure you get it right. In strongly trending markets, you can throw a dart to pick your entry and make a ton of cash.  The position size is the part of your trading algo where the sword cuts both ways. It's also the part of your trading that goes to the core of any self-doubt you might have about your ability. Trade to big and bad news and ba...

Some options trades require you to complete the structure in two steps.  Whereas you don't want to "leg" into intra-commodity spreads, you might consider that a strategy for your butterfly or condor trades.  Instead of putting on a long butterfly all at once, many traders we've worked with are buying call spreads, for example, and then after the market moves selling the call spread above it to com...

Michael Martin discusses how it's appropriate for some traders to focus on one market or sector for professional purposes. 

Both winning and losing streaks are "user-defined" so make sure you understand what your trading results are telling you. Here's one way to know.

You are powerless over the markets, regardless if you have 30 years of experience or only 30 days.  Focus on your process, because you can't control the outcome.  I believe you need to have positive intention about your trading as "intentions equal results."  Your intention is closely related to your attitude and your attitude affects your judgment, judgment affects your behavior, and behavior pre...

In this episode, Michael Martin has a frank discussion about what you need and what you don't need at the beginning of your career.  In one sense, your job is to survive. That means going slowly and playing superior defense.  Many traders keep a full-time job to make sure they can pay their bills before going solo. 

Michael Martin discusses the "triumvirate" that every trader needs to succeed long-term trading the markets. 

In this episode, a reader asks Michael Martin about some of the markets he's trading. 

Most allocators know that you are powerless over the markets. But if you tell them the markets you trade, they'll have a good idea of where your performance should come from. 

Be mindful of all your trading activity and non-activity. Growing too slowly can be problematic, but so can growing too quickly. 

You don't have to double your position to have added to a winning trade.  Try adding 20% to see how it feels.  For best results, you'll have to backtest in a simulator to determine the best location and position size for adding to your winners.  If you believe, like I do, that most markets don't trend and that trends persist, this might be a good tactic for you to look at. 

The hardest part of investing (and trading) is knowing when to take profits. In my trading, I'm using systematic exits. Harder, is when I have a long-term buy and hold in my investment portfolio and I have to let go of a name that I've had for ages.  See the corresponding video on Disney. 

You can create some interesting spreads between weekly and monthly option expirations. Some traders buy the longer dated options and sell nearer expirations to pay for them.  Get the MartinKronicle Android App - it's free.

There are traders whose sole responsibility is to create alpha in only one sector or in one commodity group. Sometimes, it might be in just one contract such as natural gas, for example.  Since most markets are not trending, focusing on one sector can be a challenge if there is no direction or trend. Unless you've been trained... These particular traders have learned to make money in natural gas r...